AUGUSTA, Maine — Maine will collect $113 million more in revenues over the next few fiscal years than expected as the state's economy continues to slowly but steadily improve after the Great Recession, a group of Maine economists and officials said in a new report.
The report from the Revenue Forecasting Committee, which was submitted to Gov. Paul LePage on Monday, comes as the Republican governor and lawmakers gear up to craft a state budget for the next two fiscal years, which begins July 1.
The committee predicts that Maine will bring in $45.5 million more than anticipated in the current fiscal year. It is projecting an increase in revenues of $67.5 million over the next two fiscal years.
The adjusted forecast is being driven in part by higher-than-expected individual and corporate income tax collections.
Richard Rosen, the acting commissioner of the Department of Administrative and Financial Services, said Maine's "reliable and conservative approach to revenue forecasting has helped ensure that the state is in a sound financial position."
The funds will help close what was originally estimated to be a $461 million structural gap in the upcoming budget cycle, Rosen said.
The structural gap is the difference between what Maine is required to fund and how much revenue it expected to collect. It exists, in part, because the sales tax — which was temporarily raised to 5.5 percent in the current budget — is set to revert back to 5 percent.
The panel warns that even though the "short-term outlook is generally positive," the state's demographics pose a serious challenge for Maine's economic future.
The report says employment and income growth will be restrained in the coming years because the state is seeing "little to no population growth" and more people aging out of the workforce.